Solitary Picker Seeks Growth Stocks

Solitary Picker Seeks Growth Stocks

An adviser to institutional investors, Dahl scours the country for companies to which Wall Street analysts are cool.

And if the price is right and the potential powerful, Dahl might recommend the companies to portfolio managers who oversee $2 million and up.

His client list includes insurance companies, mutual fund management companies, and banks and trust companies that pay from $25,000 to six figures for his services.

"You have to know how to pick the stocks that go up," Dahl said, stating something that might be obvious, but for most investors is easier said than done.

His reports to investors are brief -- five pages or so -- and concentrate on Dahl's "critical variables" -- anything that affects the price of a stock.

His report on The New York Times Co., for example, highlighted items such as cash flow per share, advertising lineage, circulation, depreciation and interest expense, with text that detailed his analysis.

He gathers information from a company's financial documents and also meets with its management.

Executives sit with Dahl and answer his questions because "they know what I say is going to go firsthand to some of the biggest investors in the financial market," Dahl said.

Ever since Dahl started C.K.D. Analysis in 1984, his picks have consistently outperformed the market, he said.

In 1989, Dahl's portfolio brought a return of 31 percent, and the Dow Jones average of 30 industrial stocks was up 27 percent, he said.

In 1990, Dahl and the market had a bad year. His picks were up 2 percent, and the Dow was down 4 percent, Dahl said.

Janet Prindle, a partner at Neuberger & Berman, a Manhattan investment management firm, said she has called on Dahl's expertise for about six years because "he's a real moneymaker."

"He's very insightful, and he has a very interesting way of looking at companies," Prindle said. "One of the companies I made a lot of money with is Wendy's."

Dahl began recommending Wendy's International Inc., the national restaurant chain, in March 1990 when it sold at $4.12 1/2 a share. On Wednesday, it closed at $12.12 1/2 .

The 52 successful stocks that Dahl has recommended during his solo career include Nike, Four Seasons Hotels and Seagram.

But he has had about a half-dozen losers, too.

Dahl, 39, runs his company from his North Stonington home -- his back yard includes a hot tub and a frog pond -- and an office in Mystic.

But he spends little time at either place. Instead, he's on the road, meeting with fund managers or researching companies that he's considering. "I've always said, `You're not doing your job if you're in the office, " he said.

Dahl has had his own experience running a company. But at age 15, he might have been one of the youngest company presidents ever.

In the late 1960s, Dahl started the Turks-Head Rope Bracelet Co., which sold bracelets handmade with nautical braid. With his seven employees, Dahl built the company to 600 accounts, including G. Fox, Jordan Marsh and Macy's.

"As a kid, I always had a talent for taking `X' and turning it into currency," Dahl said.

His first job analyzing securities was with the former Connecticut Bank and Trust Co., a job he held after graduating from Trinity College with a degree in economics.

From there, he went to Wall Street, first with communications conglomerate Gulf & Western, then with pension funds manager Beacon Management Co.

Life was good. A six-figure salary. Unlimited first-class air fare. A company car. He even subletted a rent-controlled townhouse on East 58th Street right across the street from Frank Sinatra.

But after seven years in Manhattan, Dahl said he'd had enough, professionally and personally.

"I wanted to do my own thing. I didn't want to work in a bureaucratic structure," Dahl said. "I wanted to get away from the rat race of the New York City environment."

So Dahl headed to North Stonington, where he had bought a house in 1979 that he rarely used, mostly because he had worked and traveled so much.

With a five-year consulting contract from Beacon to get him

started, Dahl set out to cut his own path in the investment community, working through the contacts he had made during his Wall Street tenure.

"The clients I had introduced me to others," he said.

Because Dahl is not working for a brokerage house or a bank, his only interest is helping the client -- and himself -- make money, Shinn said.

"He's not looking for an investment banking relationship. He's not looking for a transaction. He's just looking to make money for you." Shinn said.

And although Dahl has plenty of competitors -- many of them large and powerful brokerage houses on Wall Street -- "there's only one C.K. Dahl," Shinn said